Required information [The following information applies to the questions displayed below.] Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year's income statement Assets Sales Cash $ 22,000 $ 30,000 Cost of goods sold Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity 33,400 84,340 5,700 290,000 $ 435,440 $ 526,400 Cash dividends per share Beginning-of-year balance sheet Accounts receivable, net Merchandise inventory data $ 70,340 79,800 $ 97,300 105,000 206,000 118,100 Total assets 180,000 105,300 $ 435,440 $ 526,400 Common stock, $5 par value Retained earnings 54,400 Interest expense $810,000 583,100 7,800 $ 917,200 640,500 11,000 128,500 Income tax expense 15,569 25,321 7,100 306,400 Net income 203,531 240,379 Basic earnings per share 5.65 5.83 3.77 3.96 $ 28,800 $ 57,200 59,600 109,400 428,000 412,500 180,000 206,000 37,489 40,873 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company's stock can be purchased at $85 per share, compute their (e) price-earnings ratios and (f) dividend yields. 2b. Identify which company's stock you would recommend as the better investment.